Saturday, August 14, 2021

Company prospecting: Olam

Just sharing some of my thoughts here.

Olam is a food commodity trader, processor, producer and distributor. There are a few pieces of good news that I thought but Olam shares are trading a recent low. (Post rights theoretical price should be around $1.6) 


Yet, they recently announced record earning and has firmed plans for demerger of OFI to primary list in LSE and secondary listing in SGX. 

Given commodity prices has a good run, and with 1H earning of 11 cents, even if they only 4 cents in 2H (Which is highly unlikely given the elevated food prices, as well as worries over supply disruptions and inflation etc), Olam will be in the PE range of 10. 

Olam also increase dividends in 1H, signaling the confidence of management. 


In terms of valuations, this is the first time in a decade that you will have a chance to get a "discount" in terms of PE of 10 (Lowest), and with PS and PB below 0.15 and 1 respectively. (Barring big writedown of assets due to big swing down of commodity prices.)

If earnings is good, expanding, and there is no obvious dark clouds in the horizon, why such low valuation?

Next, when Capitaland announce it's restructuring, everyone cheers!

When Olam announce it's restructuring, people cheers then start dumping? 

Next, is commodity super cycle coming?

Since June 2020 the price of food is on a tear, 




Even the high prices continue, it is a bonus, if it doesn't, I hardly think with the restructuring going on, the new IPOs will command a valuation that is lower than the 3 metrics I mentioned earlier.

So in conclusion, I think Olam is underappreciated by the market now.  








 

5 comments:

  1. Right issue at $1.25 generating nice paper gains for Temasek

    ReplyDelete
  2. Hi CW, let us not forget that u need a to be a existing shareholder befor u get the Rights. Is not aa cheap as it seems.

    I also need to buy some at high price before i can apply for excesses

    ReplyDelete
  3. I need to to thank you for this great read!! I definitely loved every bit of it.
    CHECK NOW I have got you bookmarked to look at new stuff you .

    ReplyDelete
  4. Natural Herbal Medicine To Cure {HERPES DISEASE} TOTALLY HERE 
    Do you need a solution to cure your Herpes Disease contact Chief Dr Lucky to help and he will surely help you to cure your Herpes Virus .. I have suffered from Herpes-2 Virus for 4years ago that almost took my life. But one day I was searching the internet and I found Chief Dr Lucky saw so many testimonies on how Chief Dr Lucky helps people in curing their deadly diseases, and I contacted Chief Dr Lucky, asked him for solutions and he started the remedies for my health. He prepared herbal medicine for me and I received the herbal medicine and after using it for 2 weeks my condition has greatly improved, all my symptoms including Abdominal pain, Nausea and vomiting, Loss of appetite stopped, so I went to my doc and was confirmed negative. I am Herpes Virus free! contact the herbal doctor via his email> chiefdrlucky@gmail.com also visit his page> http://facebook.com/chiefdrlucky Website> Https://chiefdrluckyherbaltherapy.wordpress.com/ or his cell number / WhatsApp> +2348132777335

    ReplyDelete
  5. I have to give it to you, this is top shelf content. Seeing as the internet is full of trolls, finding such amazing info on your blog really got me hoping again. Just like you, we also educate people through our platform on HOW TO BECOME A PROFESSIONAL NURSE , so you can always check us out for credible content. I will bookmark this webpage to get real time updates. Cheers

    ReplyDelete